CSC Canadian Capital Markets 1

Question 1

Which market is where newly issued securities are sold to investors for the first time?

Accepted Answer

Primary market

Answer

The primary market is where issuers sell new securities directly to investors through mechanisms like IPOs and new bond offerings.

Question 2

The Toronto Stock Exchange (TSX) is best described as which type of market?

Accepted Answer

Secondary market

Answer

The TSX is a secondary market where previously issued securities are bought and sold between investors.

Question 3

Which organization regulates the conduct of investment dealers and their registered representatives across Canada?

Accepted Answer

CIRO

Answer

The Canadian Investment Regulatory Organization (CIRO) oversees investment dealers and mutual fund dealers and their registered individuals.

Question 4

What is the primary function of an investment dealer acting as an underwriter?

Accepted Answer

Guaranteeing the purchase of a new securities issue from the issuer

Answer

An underwriter buys the new securities issue from the issuer and resells them to the public, taking on the risk of distribution.

Question 5

A 'best efforts' underwriting agreement means the investment dealer will:

Accepted Answer

Use maximum effort to sell the issue but does not guarantee full sale

Answer

Under a best efforts agreement, the dealer acts as agent and tries to sell as much of the issue as possible but returns unsold securities to the issuer.

CSC - Canadian Securities Course Practice Test

CSC - Canadian Securities Course Practice Test

CSC Canadian Capital Markets 1